With all this talk of pay freezes and pension reforms it's no wonder that some firms see the increase of pension payments as a valuable tool for attracting top staff. Pensions have been the subject of much debate for some time now. They are becoming ever more important due to the abolishment of the compulsory retirement age along with general increases in life expectancy.

Research by EEF's Manufacturing Organisations has found that the more than 250 firms that it interviewed were largely in favour of the mandatory contributions from both employees and employers. Despite it being a highly contested area in terms of policy and reform, most employers are aware of the positive effects that a good pension scheme can have. This is true not only when trying to recruit new staff but also in the battle to retain the best talent.

The biggest problem for employers with pension schemes of late has been the increase in regulation. More regulation means higher management costs. What employers do not need now is more regulation. Those in the know say that it is important for the Government to resist any pressure from the EU to introduce more regulation in the area.

In order for employers to continue to provide the best pension scheme for their employees it is becoming increasingly necessary to make changes to when someone is entitled to draw their pension. Retail giant Tesco recently announced that it is considering an increase in the age from which a full pension will be paid from sixty five to sixty seven years old. They also plan on changing the way that they measure inflation swapping from the Retail Price Index to the more conservatively measured, Consumer Price Index. These changes, they argue are needed to ensure that the scheme remains sustainable.

Tesco are not alone in these changes with many others seeing the age increase as necessary. Other employers have gone further by actually closing their defined benefit schemes down and leaving new recruits with a pension that relies solely on the investment market.

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